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2025-12-13 13:30:57
[US Treasury Yield Curve Steepens, Tug-of-War Between Inflation and Growth Escalates] ⑴ The yield on the 10-year US Treasury note rose 5.1 basis points to 4.192% on Friday, rebounding after two consecutive days of decline. The yield gained more than 5 basis points this week and is poised for its second consecutive week of increases. ⑵ The 2-year yield, closely linked to interest rate expectations, fell slightly by 0.6 basis points to 3.524%, a drop of about 4 basis points this week, diverging from the longer-term trend. ⑶ This change widened the spread between the 2-year and 10-year yields to approximately 66.8 basis points, the widest level since April 9th. The curve exhibits a typical "bear steepening" pattern, where long-term interest rates rise faster than short-term rates. ⑷ Market analysts believe the "bear steepening" reflects investors' repricing of next year's economic growth prospects and expectations of continued inflation. Many expect large-scale tax cuts and spending bills to boost the economy next year. (5) The 30-year Treasury yield jumped 6.9 basis points to 4.859%, rising nearly 6.7 basis points this week, and is on track for its second consecutive week of gains, indicating significant selling pressure on long-term bonds. (6) Concerns about inflation within the Federal Reserve are a key factor influencing the market. Officials who voted against rate cuts emphasized that inflation remains too high, and the government shutdown has resulted in a lack of key data, increasing policy uncertainty. (7) Regarding inflation expectations, the break-even yield on 5-year Treasury Inflation-Protected Securities (TIPS) closed at 2.325%, while the 10-year yield was 2.275%, indicating that the market believes the long-term average annual inflation rate will be around 2.3%, still higher than the Fed's target.
